The funding crisis facing Irish universities is underlined in a major new report which says they lack the necessary resources for future development.
The report says the seven Irish universities are "not operating on a financially sustainable basis at present".
It reveals the universities had a combined surplus of only 1.5 per cent on a turnover of €1.1 billion. According to the report, this level of surplus is inadequate to allow them to maintain their academic and physical infrastructure in a fit condition.
The report from the Higher Education Authority (HEA) undermines the notion that the colleges are sitting on vast financial reserves. The report says the universities should be holding some €150 million to allow for strategic development, but they currently hold only €16 million in reserve.
The findings are contained in the report "The Financial Position of Irish Universities at 30 September 2003" prepared by a working group comprising three high level independent expert advisers and chaired by Mr Tom Boland, Secretary/Chief Executive of the HEA.
The largest financial surpluses achieved by individual universities were of the order of only €5 million in the case of UCD and TCD on turnovers of €289 million and €222 million respectively.
This was below the levels which the working group considered to be essential if universities are to remain academically and financially sustainable.
The report states that the creation of surpluses is essential to allow universities to accumulate cash for strategic investments and found:
The universities should be aiming to create modest surpluses of approximately 3 per cent of income each year, in addition to providing for depreciation - which itself could require a provision of up to 5 per cent.
The Government must find a way to give clear and more stable planning to the universities if they are to be in a position to manage and plan their affairs strategically.
The HEA should work with the universities to develop institutional financial strategies. Universities need to be able to manage their finances and assets on a more strategic basis while at the same time be responsive to national needs and accountable to the State .
Universities need assurance that they will not be penalised for generating private funding. This should not undermine the flow of State support.
Last night Dr Don Thornhill, Chairman of the HEA, welcomed the recommendations, stating that "the Irish universities... are an essential cornerstone of the knowledge society. They need to be managed and financed in a strategically coherent way which reflects their critical role in national development."
